DECC strategy marks an important development for UK community energy

The Community Energy Strategy marks an important step in the development of community energy in the UK that should not be underestimated. It is the first of its kind ever to be published in the UK and it sets out the role of communities in the UK’s energy and climate response.

To date, the role of communities in energy generation, demand reduction, energy management and energy purchasing has been ill-defined and this report has clearly involved a lot of consultation and analysis to help rectify these shortfalls. Following the concession that ‘much of DECC’s focus has been to help deliver large national infrastructure projects’ it sets out its ambition ‘that every community that wants to form an energy group or take forward an energy project should be able to do so, regardless of background or location.’ This broad approach to community energy includes partnerships, capacity and capability building, measuring impact, electricity generation, heat generation, reducing energy use, managing energy demand and purchasing energy. Specifically, issues regarding renewable electricity generation, district heating, training programmes, local authority collaboration, energy-saving programmes and energy poverty alleviation are analysed and strategies developed accordingly.

On closer analysis it is evident that some of these areas are already integrated into the existing energy policy framework while others require support and development outside the realm of energy policy. Community electricity generation in particular is an area that has seen considerable growth in recent years and DECC states that over 60MW of generation capacity is currently in operation with solar PV and onshore wind the most prevalent technologies. This is also an area where DECC is willing to provide tentative suggestions regarding sector development. Depending on the scenario, community energy could provide between 0.5GW and 3GW of installed capacity through solar PV, onshore wind and hydro, representing between 2.2% and 14% of total capacity of these technologies and generating between 0.3% and 1.4% of the UK’s entire electricity consumption in 2020. Crucially, this would not present additional generation capacity but rather a shift in the ownership model from commercial developers to communities (at the large scale) and from individual household-level generation to community ownership models (at the small scale).

The strategy places strong emphasis on greater scales of technological deployment through partial-ownership and joint ventures with commercial developers. Over 50% of the potential community capacity, not only for electricity but for energy generation in general may be delivered using shared ownership models and would see investment rise to £320m, potentially £1.5bn by 2020. It is also expected that by 2015 it will be the norm for interested communities to be offered some level of ownership of new, commercially developed onshore renewable projects. A further important development regarding finance and up-scaling would be the proposed expansion of the Green Investment Bank’s approved scope of operation to include the provision of wholesale finance to community energy groups. Informal discussions with the European Commission regarding state aid implications are underway. An increase of the maximum capacity for community projects eligible for feed-in tariffs from 5MW to 10MW is also proposed in the hope that it will remove ‘the perverse incentive for community groups to limit their electricity generation projects to 5MW.’ Working groups are set to bring together regulators and industry to produce action plans in 2014 to tackle issues communities face regarding planning and permitting, electricity network connections and hydropower.

If these issues can be resolved and the plans are to be realised the combined effect of launching the £10m Urban Community Energy Fund to complement the £15m Rural Community Energy Fund and the quadrupling of the Green Deal Communities scheme to £80m should provide a significant and concerted effort towards community energy development in the UK. These ambitions are underlined by the ‘one-stop-shop’ new Community Energy Unit in DECC.

Despite all these positive aspects, however, the wider UK energy policy framework that has started to emerge in recent months places some question marks over the direction and role of community energy within the wider framework of decarbonisation and energy system transformation.

For instance, rather than setting ambitious targets such as Scotland’s 500MW of renewables to be locally-owned or community owned by 2020, the report only indicates a clear level of ambition for community electricity generation. It also fails to provide details on what government is willing to do beyond the (very important) provision of funding streams, nor does it provide communities with a clear strategy for action. More fundamental questions also need consideration, particularly what helping ‘community energy realise its electricity generation potential’ implies in light of an ‘all out’ government commitment for shale gas and how the idea of challenging the Big 6 with the ‘Big 60,000’ fits in with guarantees provided to developers of nuclear power.

It appears as though the report has been published just in time to supress worries regarding the direction(s) that UK energy policy has recently taken but despite its well-intended rhetoric it remains vague concerning several important aspects. Less of a commitment towards ‘low carbon’ and greater emphasis on renewable energy technologies such as provided by the German, Danish and many of the UK community energy examples might have provided community energy development with a clearer direction. A greater commitment towards empowerment would also have cancelled out suspicions of community energy’s ‘additionality’ as opposed to a fundamentally different approach to centralised generation in the UK. An example of this is Germany’s ‘Energiewende’ which, at least according to the BMU, Germany’s equivalent of DECC, is proposed to be ‘a community and citizen project’.

Admittedly, direct country comparisons are difficult, a point also made clear in the Community Energy Strategy, and these arguments should not detract from the importance of this report for the development and expansion of community energy in the UK.